“With payrolls trending upward and unemployment trending downward month after month in an extensive string of positive economic news, demand remains quite strong,” according to an analysis included with the report.

“Given the fact that gradually rising mortgage rates often infuse urgency to get into a new home before it costs more later, buyers need to remain watchful of new listings and make their offers quickly.”

The average house spent 84 days on the market before selling, which is one day fewer than last year, and sold for 99.5 percent of original list price.

The average price of a house sold in the city in May was $240,968 or 3.5 percent more than a year ago.

Inventory dropped to a three-month supply, down 25 percent year-over-year.

“Having a balanced number of homes for sale is an ongoing concern in most submarkets, as demand exceeds inventory,” the report said. “New construction optimism is tempered by building costs, but clever builders will figure out ways to turn profits while the economy is ripe for production.”